The Edmond Sun


July 27, 2012

Health care reform may help business

EDMOND — As people realize the Patient Protection and Affordable Care Act may stick, individuals and legal experts are beginning to look into how the law will affect them.

The Affordable Care Act was signed by President Barack Obama on March 23, 2010. It is designed to be comprehensive health care reform for the U.S. On June 28, the U.S. Supreme Court ruled the law constitutional under Congress’ power to tax.

It is one of the most partisan topics in modern politics, especially in the Republican-controlled U.S. House of Representatives, which has voted 33 times to repeal the law.  

One point Attorney Shannon Davies of the law firm Lester Loving and Davies, 1701 S. Kelly Ave., said was striking is the small business tax credit offered in the health care law.

This portion of the law went into effect Jan. 1, 2010, but has gotten little notice, Davies said. She said part of the problem may be that the program is very difficult to apply for and receive for businesses.

In short the credit — an amendment to the Internal Revenue Service tax code — says employers with 25 or fewer full-time employees who average an income of less than $50,000 annually and offer coverage that pays for at least 50 percent of a worker’s health care cost can get a 35 percent of their taxes back. For nonprofits the tax credit is 25 percent.

In 2014 the credit jumps to 50 percent for small businesses and 35 percent for nonprofits.

“Most small employers don't even offer health care anyway for their employees,” Davies said. “If you’re really small it's very difficult to do.”

She said another unintended catch is since this credit hasn’t gotten much attention, not many employers are even aware of the benefit.

Such was the case with Darryl Rowley, general manager of Arctic Edge Ice Arena, 14613 N. Kelly Ave. He said the tax credit would work for his crew of about 20 people, two of which are full-time.

“I’d definitely be interested in it and offer it to my employees,” Rowley said.

He said most of his part-time workers are ages 17 to 20 and are usually still under their parents’ insurance, which they can remain on until age 26, according to the new health care law. But Rowley said he has a different perspective.

“I grew up in Canada,” he said. “It was much easier. It wasn’t about money, it was more about health.”

Canada has had universal health care since the Canada Health Act of 1984 was passed.

What has come with a lackluster amount of fanfare for these business tax credits is that many people are not applying for it or have chosen to not apply.

“I think in this act what (the government) was trying to do was make smaller companies able to offer health insurance to their employees,” Davies said. “And it’s turning out so far that the anticipated benefit of like $41 billion has now been reduced to $21 billion because nobody is using it.”

Davies said that may change when the credit jumps to 50 percent, but cautions employers to get legal advice and assistance before applying.

"There may be some point in time where it may make some sense to look at this tax credit for a small employer,” she said. “And it might be fiscally responsible to do."

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